1. 1 Which statement is most accurate? Hedge funds differ from unit trust funds in that they can

Take more than a few days to pay you out.

Borrow more than what you invested to buy more shares or other securities.

Sell shares they do not own

All of the above.

2. A market neutral fund aims to:

Give you returns that are neither higher or lower than the market returns.

Give you a positive return regardless of whether the markets are up or down

Can invest both long and short

B and c.

3. Many offshore hedge funds charge according to the two-and-20 rule, which means:

Their management fee can be between two percent and 20 percent.

They can charge an ongoing management fee of two percent and a performance fee of 20 percent of all of the performance above the benchmark or hurdle.

They charge R220.

They can charge a performance fee of 20 percent when the performance is above two percentage points above the benchmark.

4. One of the key protections afforded investors through the regulation of hedge funds as collective investment schemes is that these funds must:

Only let you invest if you are not very well-off.

Only borrow to invest when a manager is very sure the investment will make money.

Have a risk management policy to measure and test operational, business, liquidity and credit counterparty risks.

Not allow you to invest more than R1 million in a hedge fund.